What is the value of my home?

You’ve heard of market value, appraised value and county tax appraised value. What’s the difference?

Market Value

Market value, in a nutshell, is what a reasonable buyer would pay for your home at a given time. Ultimately, market value will determine the selling value of your property. Many factors impact market value such as:

The Competition

· The number of similar properties for sale

· Their prices, financing terms, location and physical condition

Physical qualities of your property

· Location

· Age

· Size of house and lot

· Floor plan and architectural style

Market Conditions

· Interest rates and availability of financing

· Buyer demand

· Prices of recently sold properties

· State of the economy

· Seasonal demand

Appraised Value

Appraisals provide an objective opinion of value. Appraising property is not an exact science, so appraisals may differ. For buying and selling purposes, appraisals are usually based on market value — what the property could probably be sold for. Other types of value include insurance value, replacement value, and assessed value for property tax purposes.

Appraised value is not a constant number. Changes in market conditions can dramatically alter appraised value. Appraised value doesn’t take into account special considerations, like the need to sell rapidly. Appraisals typically look at homes that have already sold, usually 3 to 6 months prior to the appraisal, but appraisals can look at sold properties as far back as 12 months. If market conditions are changing rapidly, whether improving or declining, the appraised value will not reflect the changes occurring.

Lenders usually require an appraisal to be completed. The appraised value must be at least equal to the sales price for the lender to approve the loan.

County Tax Appraised Value

Property taxes are local taxes. Local officials appraise and set the value of your property, set your tax rates and collect your taxes. Each county’s appraisal district determines the value of all taxable property within the county. Before the appraisals begin, the district compiles a list of taxable property.

To save time and money, the appraisal district uses mass appraisal to appraise large numbers of properties. In a mass appraisal, the district first collects detailed descriptions of each taxable property in the district. It then classifies properties according to a variety of factors, such as size, use and construction type. Using data from recent property sales, the district appraises the value of typical properties in each class, taking into account differences such as age or location, the district uses “typical” property values to appraise all the properties in each class.

The value of your home is an estimate of the price your home would sell for on January 1. The appraisal district compares your home to similar homes that have sold recently and determines your home’s value.

It’s important to remember that tax appraised values do not take into account the same factors a buyer or Real Estate agent would when comparing homes for finding an estimate of the market value.